Suez will have to accelerate its cost reduction efforts to achieve its profitability targets (AFP / ERIC PIERMONT)
This is a “half halftone” said Jean-Louis Chaussade, CEO of the water management and waste specialist, during a conference call.
If the first six months of the year net profit was up 23.7% to 174 million euros, above analysts’ expectations, and revenue of 2.2% to 7.45 billion euros, operating profitability, it, s ‘deteriorated.
the gross operating profit (EBITDA) was down 1.7% to 1.27 billion euros and EBIT decreased by 1% to 598 million euros (-2.3% organic).
“we have to react strongly and immediately to achieve our goals,” insisted Mr. Chaussade.
Already committed since several years in an internal reorganization, including the unification of the brands under the banner “Suez”, and a cost reduction program called “Compass”, Suez will therefore go further.
reductions costs will reach 180 million euros this year, 30 million euros more than expected.
Suez will also “strengthen the control of (its) investments, particularly in France, and also the debt control “and” speed up (its) transformation to make the most integrated, more agile, more powerful to seize all development opportunities, “detailed Mr. Chaussade.
after discussions with employee organizations, which began in June, measures will be announced at the end of the third quarter, he said, without indicating whether this would result in staff cuts, evoking the moment measures mobility and training.
These efforts were welcomed by the markets, the Suez share taking 2.36% to 14.34 euros at 9:55, in a market up 0.38%.
such actions were expected by analysts, to the extent that the complicated economic situation in Europe did not allow the group to rely on the activity to take its growth and profitability.
– ‘unusual Climatology’ –
in the first half, Suez continued to suffer from the low prices of raw materials and energy that affect its branch Recycling and exploiting Europe
Jean-Louis Chaussade, CEO Suez, said he was “serene” in the goals for this year (AFP / ERIC PIERMONT)
His branch Water Europe has she suffered an “unusual climate”, says Chaussade, with floods in France but also in Chile where a plant affected by the water, had to be stopped.
Only satisfaction, strong growth in International business, driven by China, Middle east or Australia, thanks to new contracts.
with the actions announced Thursday, Jean-Louis Chaussade said he was “serene” in the goals for this year, including an organic growth of business greater than or equal to 2% and organic growth of EBIT at least higher than that of sales.
However, Suez has not confirmed his ambition to achieve an EBITDA of EUR 3 billion in 2017 which was based on an internal and external growth.
Although Suez announced some acquisitions or equity midsize participation (Sembsita Australia and Perthwaste Australia Driplex India), external growth projects of the group are insufficient and that goal “No. is really a priority, “conceded Mr. Chaussade.
with its commitment to grow in Italy, Suez announced Thursday also be” being finalized “in discussions to increase its stake in the Italian company ACEA, from 12.5% to 23.3% through a new share issue.
Copyright © 2016 AFP. All rights of reproduction and distribution reserved.
All information displayed on this section (dispatches, photographs, logos) are protected by intellectual property rights owned by AFP. Therefore, none of this information may be reproduced, modified, transmitted, redistributed, translated, sold, exploited commercially or used in any way whatsoever without the prior written consent of AFP. AFP shall not be held responsible for delays, errors, omissions, which may not be excluded or the consequences of actions or transactions made on the basis of this information.